Feb 2018 Update

The theme for the month was volatility.  A couple of ETNs cratered as a result of the high volatility causing investors to lose significantly when using these levered products.   “We sincerely apologize for causing significant difficulties to investors,” Nomura said.  Credit Suisse stated “investors who held shares of XIV had bet against at volatility at their own risk.  It worked well for a long time until it didn’t, which is generally what happens in markets”.   Caveat emptor.

During the month, the S&P index dipped into correction territory before rallying to close the month down 3.89%.  My portfolio sympathized with the index closing down 5.53%.  I never hit correction so my peak drop was less but I also failed to recover as quickly.  Probably an area to perform a root cause analysis on at some point.  Following back-to-back monthly losses against the S&P, I’m down 3.44%  to start the year. Continue reading

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Portfolio Weightings

When I researched my holdings and dividends for my quarterly review, I noticed something that required further analysis.  I put it aside while completing my taxes, but resolved to readdress it.  The issue is portfolio balance – or more specifically – being out of balance.  I noticed over the past few months that portions of my portfolio were sliding farther from their assigned allocations.  I currently rank my holdings by value (price * # shares).  I then weight by category.  The companies I’ve identified as Anchor positions would comprise a maximum 18% of the total value.  Frankly, none of these positions has yet attained the 6% threshold since I only added this category last year.  WEC (5.4%), CLX (4.6%) and KMB (3.8%) hold these slots and I haven’t been adding to them this year outside of dividend reinvestment due to valuation.  So my ‘heavy hitters’ aren’t out of balance.

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